5 Money Mistakes Smart People Make

Everyone has at least one frugal friend who always crows about how much money he saves by clipping coupons or frequenting discount stores. And while this friend’s behavior/bragging is a great reminder of how you should be more financially savvy — especially when the U.S. economy isn’t in the best shape — he may overlook some simple savings strategies that you’ve already figured out.

Even the smartest saver can make mistakes, and Bankrate.com published a list of those easy to miss but, oh-so-simple savings strategies that everyone should mind.

Mistake No.1: Minding the pennies and missing dollars

Driving across town to use a 50-cent coupon, or to shop at an outlet store isn’t saving you as much dough as you think. In fact, you may have spent more in gas just to get to that tucked-away discount store. Bankrate.com advises that you focus on your long-term financial goals, while you save on the small items. For example, if you find that you saved $7 with coupons, walk over to your ATM and deposit that $7 into a savings account, instead of spending it on something else.

Mistake No.2: Being confused by credit reports

Not knowing your credit score, especially if it’s poor, can cost you more money if you want to buy a car or rent a home. Scour your credit report for any outstanding balances or inconsistencies. Even if you know your credit score, you should request a copy of your report every year before you make a major purchase.

Mistake No.3: Letting budgeting get you down

Budgeting becomes a drag when you find yourself staying in more or buying less fun things to save money. But, keep in mind that most people don’t like to save. Prior to the economy’s trouble, the U.S. savings rate was less than 1 percent, according to the U.S. Commerce Department. Apparently, more Americans found it more fun to spend rather than save. In order to make spending feel less like a chore, identify three areas where spend too much and try to deduct the amount you spend on each.

Mistake No.4: Letting your money leak away

Money leaks are those little ways you spend money without even thinking about it, such as the $20 you hand your kid when he asks for it, or your daily latte. Try to keep track of all these money leaks by logging them into a journal. At the end of the week, you will see just how much money coming out of your account, and where you need to plug the leak.

Mistake No.5: Being out of touch

Try to stay up-to-date on family finances. If one spouse is in control of taxes, bills and investments, etc., make sure you’re knowledgeable about where key financial documents are and how much is being spent and when. If you don’t, you could be in for a rude awakening.